With ever-increasing taxes and changing, complex tax rules, simplifying business taxes is a top priority for many small businesses.
Last week marked the official close of the 2015 tax season, and many small businesses are breathing a sight of relief. Preparing and completing taxes is one of the biggest challenges small business owners face.
In fact, top concerns about taxes for small business are high tax rates, understanding the complex tax code and frequent rule changes that make it hard for businesses to maintain compliance, according to a recent statement from the National Federation of Independent Business (NFIB).
“Five of the top 10 problems are all tax-related,” said NFIB research director Holly Wade. “They’re concerned about the amount of taxes they have to pay; the cost of hiring tax professionals; and the time it takes them to comply with the law.”
The average small business spends a full 24 hours preparing tax returns, according to NFIB.
While in a perfect world, taxes would become simpler to manage over time, the reality is that they are only going to become more complex, especially as a business grows.
A year from now many business will be in the exact same place, pulling their hair out over 2015 taxes. Others will deploy advanced accounting software to manage finances and compliance, simplifying business taxes preparation, reducing waste and reducing risk of penalties for non-compliance.
While entry level accounting software such as QuickBooks offers an affordable solution that is easy to use, many small businesses have complex reporting and tax requirements. Basic accounting software often lacks consolidated financials, multi-entity reporting and multi-currency reporting that these companies need.
Such companies would be better suited to a more powerful enterprise resource planning solution that can juggle several moving parts with consolidated data across entities. With financials in neat order and reports that are quick and easy to generate, businesses will waste less time preparing taxes and save on hours for outside accounting professionals.